Oil Steady Near 2018 High as Report Points to Falling Stockpiles

• Oil was steady near the highest close since October 2018 after an industry report pointed to a further decline in U.S. crude stockpiles, adding to signs of a rapidly tightening global market. 
• Futures in New York traded near $75 a barrel after rising 1.6% on Tuesday. The American Petroleum Institute said crude inventories slid by more than 4 million barrels last week, according to people familiar with the data. That would be an eighth straight weekly draw, the longest run of declines since January 2018, if confirmed by government figures later on Wednesday. 
• Some uncertainty looms over the market, however. Indonesia posted a record number of new virus cases, while Sydney extended a lockdown as the delta variant continues to sweep the globe. The resurgence, as well as the OPEC+ impasse on raising crude production have clouded the short-term outlook. 
• Still, oil has rallied more than 50% this year as the vaccine rollout lifts demand in major economies such as the U.S., and the International Energy Agency is warning that the market will tighten significantly if OPEC+ doesn’t resolve its standoff and boost production. Talks broke down last week and it’s looking increasingly likely that the alliance won’t add more supply in August as members lock in supply volumes to customers next month.

(Source: Bloomberg)